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On Wednesday, Stifel analysts reiterated their Buy rating and $52.00 price target for Baker Hughes stock (NASDAQ: NASDAQ:BKR), following the company’s first-quarter earnings report. According to InvestingPro data, Baker Hughes demonstrates remarkable financial strength with a perfect Piotroski Score of 9, and currently trades at an attractive P/E ratio of 12.9x. The stock appears undervalued based on InvestingPro’s Fair Value analysis, suggesting potential upside aligned with analyst targets ranging from $40 to $58. Baker Hughes reported a slight outperformance in adjusted EBITDA, primarily due to strong margins in its Industrial & Energy Technology (IET) segment. This was despite a modest revenue miss for the quarter. The company has maintained its IET guidance for 2025, citing improved visibility backed by a robust backlog and minimal expected impact from tariffs.
Baker Hughes has decided to withdraw its full-year 2025 guidance for the Oilfield Services & Equipment (OFSE) segment, attributing the decision to the current unpredictable global tariff policies and geopolitical tensions. This withdrawal suggests there could be a slight downside to the second half of 2025 OFSE forecasts. The company’s guidance for the second quarter EBITDA ranges between $1.04 billion and $1.20 billion, which encompasses Stifel’s pre-release estimate of $1.13 billion and the consensus of $1.17 billion.
The company has continued to prioritize returning value to its shareholders, with $417 million returned during the first quarter of 2025, including $188 million through share repurchases. This move reflects Baker Hughes’ commitment to shareholder returns even amidst the broader uncertainties affecting guidance in certain segments of its business.
In their commentary, Stifel analysts highlighted the strength and resilience of the IET segment, which seems to be a key driver of the company’s financial performance. Despite the challenges presented by the external environment, Baker Hughes’ ability to maintain a strong IET segment and continue significant shareholder returns has been positively noted by Stifel. The company’s financial health is rated as "GOOD" by InvestingPro, supported by strong revenue of $27.83 billion and healthy margins, with additional ProTips available for subscribers seeking deeper analysis.
In other recent news, Baker Hughes announced a quarterly cash dividend of $0.23 per share, payable on May 16, 2025, to shareholders of record as of May 6, 2025. This decision underscores the company’s commitment to returning capital to shareholders through dividends. Additionally, S&P Global Ratings upgraded Baker Hughes’ credit rating to ’A’ from ’A-’, citing improvements in its industrial energy technology (IET) business and enhanced margins. The IET segment now constitutes nearly half of the company’s revenues, with a notable 9% increase in overall revenues in 2024, driven by gas technology equipment sales.
Furthermore, Stifel maintained a Buy rating on Baker Hughes, setting a price target of $35.00, highlighting the stability provided by the company’s IET segment and its strategic focus outside the commoditized U.S. service market. In corporate governance developments, Baker Hughes announced that Lynn L. Elsenhans will not seek re-election to its Board of Directors, while Ilham Kadri will join the board, bringing extensive leadership experience. The company also faced a downturn in the S&P 500 Energy Index due to a decline in oil prices amidst global trade tensions, impacting the broader energy sector. These recent developments reflect Baker Hughes’ strategic focus on enhancing its financial health and governance structure while navigating a challenging market environment.
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